A vendor's cartridge comes back because the battery threading was stripped. An eighth of their flower expires on your shelf and you record it as waste in Metrc. In both cases you paid for a unit that was never going to make you a dollar, through no fault of your own. That is exactly what a return or waste credit recovers — and unlike every other vendor credit, it works the same way no matter how you brought the product in.
That last part matters more than it sounds. Co-marketing and inventory-aging credits only apply to wholesale product, because on consignment the vendor already shares every discount through their revenue split. Returns and waste are different. A destroyed unit isn't a discount — it's a total loss on inventory that was supposed to sell. So this is the one credit you can ask for on every vendor, on both paths, without any asterisk.
What actually qualifies
Two buckets, both backed by hard data:
- Customer returns — vendor-side reasons only. Defective product, unsatisfied customer, faulty hardware. A customer who changed their mind or bought the wrong thing is your cost of doing retail, not the vendor's, so those reasons are filtered out before anything is charged.
- Waste (destruction). Product you recorded in Metrc as destroyed because it expired on the shelf or arrived defective. Metrc is the regulator's ledger — if a unit was destroyed, there's a record; if there isn't, we don't claim it.
Each line carries the POS SKU, the Metrc item, and the Metrc package tag. The vendor's accounting team can pull their own Metrc report and reconcile every row, which is why these lines almost never get disputed. This is the same line-item backup you see walked through in the anatomy of a vendor credit memo.
The math
There's no keystone or margin calculation here — a return or waste credit is priced off what you paid, not what it would have sold for:
credit = unit cost × quantity × return policy rate
The return policy rate is the vendor's agreed share of the cost, which defaults to 100%. Most vendor agreements make defective returns and expirations fully the vendor's responsibility, so the default recovers the whole unit cost. If a particular vendor only stands behind, say, 50% of expirations, you set their rate to 50% and the platform bills half.
Worked example
Cost is resolved per unit from what you actually paid — the invoice or receipt cost on file — so the credit reflects your real exposure, not a retail figure. Two hundred and fifty-two dollars from one vendor in one month, on product that was never going to sell, is money most stores simply write off because nobody itemizes it.
The guardrails
A few rules keep these credits clean and keep the vendor relationship intact:
- Changed-mind returns are excluded. Only defensible, vendor-side reasons are charged. If a return doesn't have a reason that points at the product, it doesn't bill.
- No double-counting. If a unit is both returned and then destroyed as waste, it's credited once, not twice — the platform dedupes a return that's subsumed by a destruction of the same package.
- Consignment returns route separately. On a consignment order the return is netted through the weekly settlement at the vendor's contracted split, not billed as a wholesale credit, so a "both" vendor never gets charged twice for the same return.
- Metrc or it didn't happen. No package tag, no claim. This is what makes the credit defensible instead of a negotiation.
One operational note that pays off here: Dutchie's "Return to Inventory = No" setting skips the Metrc record, and a return that never hits Metrc can't be credited. Standardize your team on "Return to inventory = Yes" so the destruction is recorded and the credit is recoverable.
What to do Monday morning
Three things, in order:
- Confirm your return workflow records vendor-side returns and destructions in Metrc — not just in the POS. That's the source of truth the credit is built on.
- Check that each vendor's return policy rate matches your actual agreement. The 100% default is right for most, but a vendor who only covers part of expirations should be set explicitly so you're never over-asking.
- Run the month. The platform aggregates every qualifying return and waste line per vendor into one Metrc-backed credit memo you review and send — the same monthly cycle covered in generating a month of credit memos yourself.
Return and waste credits are the floor of credit recovery, not the ceiling. On wholesale vendors you'll layer co-marketing credits and inventory-aging credits on top. But this is the one to start with, because it's the one that applies to every vendor you have. If you want to see what's sitting in your last 90 days of returns and destructions, start with a free evaluation — we connect to Metrc and show you the number.